Scottish Government’s rent freeze not unlawful, judge rules

The Scottish Government’s rent freeze was not unlawful, a senior judge has ruled following an appeal by private sector landlords.

Landlords across Scotland launched the judicial review in the Court of Session after lawyers acting on their behalf argued they had been “discriminated” against as a result of “unlawful” legislation after rents were initially frozen in September 2022, before a 3% cap was introduced.

The emergency legislation is in place until March 2024, however landlords can apply for an increase of up to 6% in exceptional circumstances.

Lord Harrower ruled the challenge by Lord Neil Davidson KC, acting on behalf of several organisations including the Scottish Association of Landlords, would not be upheld.

Given the negative impact of the legislation on private landlords and the supply of rural homes, we felt that legal challenge was our only option

He ruled many arguments made by the petitioners fell “far short” and were “premature”, including the claim that the emergency rent freeze would be continued for an “indeterminate period”.

Lord Harrower also rejected the argument that the legislation was introduced “under the guise of a supposed emergency situation, sought to impose upon landlords without proper consultation, a lasting set of rent controls”, adding: “I consider that the respondents were well-founded in describing this as a bad faith or ulterior purpose challenge to the legislation.

“In that event, the petitioners would have failed to meet the high standard of proof beyond reasonable doubt which is appropriate to the challenges of that nature.”

During an earlier hearing, Lord Davidson had argued the freeze was not “temporary” because the loss in income was, in many cases, permanent.

Following the judgment, John Blackwood, chief executive of the Scottish Association of Landlords, urged ministers not to ignore the fundamental issues still present in the housing sector.

Sarah-Jane Laing, chief executive of co-petitioners Scottish Land and Estates, said: “We are understandably disappointed, but, given the negative impact of the legislation on private landlords and the supply of rural homes, we felt that legal challenge was our only option.

“This action was raised in a fast-moving situation amid genuine and widely-held concerns that the Scottish Government was not striking the right balance between the interests of tenants and landlords.”

But the Scottish Greens, whose Government minister Patrick Harvie brought forward the Cost of Living (Tenant Protection) Act 2022, said families who benefited from the cap will be “breathing a sigh of relief” following the ruling.

The party’s housing spokeswoman Ariane Burgess said: “We warmly welcome this ruling. It clearly endorses the urgent action we took to support families and tenants through the cost-of-living crisis, and will allow the Scottish Government to continue pushing ahead with further work.

“The decision also makes it abundantly clear that the case fell ‘far short’ in its arguments. I hope this clarity encourages those who represent landlord interests to engage constructively as we develop a longer term framework.”

A Scottish Government spokesperson said: “The Scottish Government welcomes the terms of the decision.

“The Cost of Living (Tenant Protection) (Scotland) Act was introduced as an emergency measure to protect tenants in response to exceptional economic circumstances.

“We continue to listen to and work hard with partners and stakeholders to develop and deliver rental sector reform, including through our New Deal for Tenants – Rented Sector Strategy.”